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advice Patience in acquisitions is key to maximizing your investment in brandables

Dynadot Dynadot
We have all been there. You pay too much for a name.

Maybe it’s been a pretty slow week on the drops and auctions when you see a nice name ending that day. Since you haven’t purchased many names this week, you convince yourself the name is better than it really is. You and another bidder go at it for another 20 minutes and you finally “win” the auction for 5x or 10x higher than what you originally wanted to spend. Or, you get into an “ego” battle over a name and also end up paying way more than it is worth.

Then, two days later you see a handful of great names you can’t afford to bid on because you spent it all on that one name. Or, you spend too much on a handful of names that you would gladly trade for one superb name that you see being advertised in a broker’s newsletter a week later.

An often overlooked side of being patient in the domaining world is when it comes to acquisitions. Every domainer has cash flow restraints and needs to make sure every dollar they spend is maximized. There is no way of knowing what names will be expiring or dropping next month, or even next week, so it is vital that you don’t overreach when buying periods are slow.

We all know the adage of buying low and selling high, but for those of us in the brandable space, I have always felt that if you can buy low then you have already won. No, you don’t get to “lift the trophy” until a sale occurs, but if you are confident in your purchasing strategy and have a solid track record, you know that day will come. Whether you need the cash and you flip it for a 2x profit or you decide to be patient and wait for that 200x return, you know you've made money on the buy.

Even if you have a healthy domain budget, you can’t expect to add hundreds of brandable domains to your portfolio per month from the drops and auctions. You'd either be overpaying for names or making sub-par purchases, neither of which is a winning strategy.

So the next time you get caught up in an auction for a domain name that you know is overpriced, take a step back and remember not to overreach. Take the names as they come. Patience is key.
 
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Has come across this stuff so many times. Yet its hard to stop at times. :(
 

Domainzy

RetiredTop Contributor
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...it’s been a pretty slow week on the drops and auctions when you see a nice name ending that day. Since you haven’t purchased many names this week, you convince yourself the name is better than it really is. ... two days later you see a handful of great names....

These 3 lines gave me goose bumps!... This happen to me this week!
 

nvdomains

Established Member
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319
Nice article. But, it is not easy to control the emotions in the heat of auctions unless one has experience and extraordinary control over one self - that separates winners and losers.

Same thing is in selling - how many people can wait and sell clink.com for $ 50,000. 99% of domainers happily sell it for $ 2000.
 

Doron Vermaat

Co-founder, EftyTop Member
Efty Staff
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The solution to this problem is quite simple, just move to Asia or Australia. Auctions usually end well past midnight for us here so you have to set a proxy bid to participate. This way you (almost) never overspend :)
 

DANEYAL

Top Contributor
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Well said! Patience is the Key.
Thanks @michaeljkrell for sharing with us your valuable & intuitive insights on domain business.
 
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"Even if you have a healthy domain budget, you can’t expect to add hundreds of brandable domains to your portfolio per month from the drops and auctions. You'd either be overpaying for names or making sub-par purchases, neither of which is a winning strategy."

Most of this post doesn't make any sense because you do the exact opposite of what you write. You play the numbers game which is quantity over quality. Yes quality is a big factor in your formula but quantity is an even bigger factor. In August alone you added over 375 names to your portfolio of which almost half were hand regs. So is the winning strategy adding hundreds of names monthly or not?
 

Keith DeBoer

BrandableInsider.comTop Member
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5,429
A very astute and well written article, Michael. The saying, "the profit is made on the buy," is an adage in several industries including real estate and its just as apt for our virtual real estate model. Like other speculative endeavors (stocks etc) emotions can make or break our business plan (assuming of course that we have one). ;)
 
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The solution to this problem is quite simple, just move to Asia or Australia. Auctions usually end well past midnight for us here so you have to set a proxy bid to participate. This way you (almost) never overspend :)

Ha, not if you're a night owl. The drop auctions for me are between 3AM to 5AM, but I am always up for them. I find that I actually end up spending more if I go to sleep early and put in proxy bids.

Great post Michael. The drop can be pretty dry for days, and then BAM!
 

Keith DeBoer

BrandableInsider.comTop Member
Impact
5,429
"Even if you have a healthy domain budget, you can’t expect to add hundreds of brandable domains to your portfolio per month from the drops and auctions. You'd either be overpaying for names or making sub-par purchases, neither of which is a winning strategy."

Most of this post doesn't make any sense because you do the exact opposite of what you write. You play the numbers game which is quantity over quality. Yes quality is a big factor in your formula but quantity is an even bigger factor. In August alone you added over 375 names to your portfolio of which almost half were hand regs. So is the winning strategy adding hundreds of names monthly or not?

I think you are mixing apples and oranges. You are saying Michael has been rapidly building inventory. Ok, but that inventory building consists of both hand reg and drops. In this article Michael is speaking exclusively about his philosophy for buying in the drops where the price you pay is variable. He's saying, don't overpay because you are impatient. He didn't say he didn't say anything about his philosophy for hand reg's which have a fixed price. Maybe that will be his next article. Cheers!
 

AndyM

Web development services, visit KingdomDesign.comTop Contributor
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Thanks Michael, I think we've all been guilty at some point of overspending and thinking you have a gem of a domain then 8 months later you finally realise.......I could have hand registered something better than that. Live and learn and be patient.
 
Nice article. But, it is not easy to control the emotions in the heat of auctions unless one has experience and extraordinary control over one self - that separates winners and losers.

Same thing is in selling - how many people can wait and sell clink.com for $ 50,000. 99% of domainers happily sell it for $ 2000.

No it's definitely true. You just have to always remember that this is a long-term play.

The solution to this problem is quite simple, just move to Asia or Australia. Auctions usually end well past midnight for us here so you have to set a proxy bid to participate. This way you (almost) never overspend :)

Ha! Yeah, that would definitely do it :)

Well said! Patience is the Key.
Thanks @michaeljkrell for sharing with us your valuable & intuitive insights on domain business.

You are welcome
 
Most of this post doesn't make any sense because you do the exact opposite of what you write. You play the numbers game which is quantity over quality. Yes quality is a big factor in your formula but quantity is an even bigger factor. In August alone you added over 375 names to your portfolio of which almost half were hand regs. So is the winning strategy adding hundreds of names monthly or not?

I'm not sure what you are using to come up with those numbers, but they aren't correct. I just looked at my GD payments from last month and I had about 50 hand regs and probably 20% or 25% were from the drop list that I didn't back order. Even 20 or 30 hand regs a month for me is high, but I have recently been running some scripts to try to track down some better handreg names that are available.. Any "new" non-GD registrations you may see are backorders.
 
Thanks Michael, I think we've all been guilty at some point of overspending and thinking you have a gem of a domain then 8 months later you finally realise.......I could have hand registered something better than that. Live and learn and be patient.

Yeah, making a mistake here or there isn't going to kill you, but if you consistantly are overpaying that can catch up with you quickly.
 
Ha, not if you're a night owl. The drop auctions for me are between 3AM to 5AM, but I am always up for them. I find that I actually end up spending more if I go to sleep early and put in proxy bids.

Great post Michael. The drop can be pretty dry for days, and then BAM!

You are welcome. If I know I am going to be gone, I will put in a proxy bid, but I haven't done it enough to know if I am actually spending more or not. I've actually been surprised by how many times I have won an auction this way.
 
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I think you are mixing apples and oranges. You are saying Michael has been rapidly building inventory. Ok, but that inventory building consists of both hand reg and drops. In this article Michael is speaking exclusively about his philosophy for buying in the drops where the price you pay is variable. He's saying, don't overpay because you are impatient. He didn't say he didn't say anything about his philosophy for hand reg's which have a fixed price. Maybe that will be his next article. Cheers!
I wasn't talking about handregs. I mentioned it but that has nothing to do with it. Remove the handregs from the list and there are still about 250 names from auctions and drops which goes against what he's saying. He added over 250 names not including handregs but says it's not a winning strategy when he himself does it. Doesn't make sense.

Quote again below

"Even if you have a healthy domain budget, you can’t expect to add hundreds of brandable domains to your portfolio per month from the drops and auctions. You'd either be overpaying for names or making sub-par purchases, neither of which is a winning strategy."
 
I got right around 175 names from drops and auctions in August. Is that technically hundreds? Maybe? Would you feel better if I changed "hundreds" to "300 or 400".
 
To add some context, 70%+ were from closeouts or I picked up with the drop with no competition.
 
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I got right around 175 names from drops and auctions in August. Is that technically hundreds? Maybe? Would you feel better if I changed "hundreds" to "300 or 400".
You can spin it however you want. I count much more than that.
 

Kate

Domainosaurus RexTop Contributor
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I find that the article applies to all kinds of domain names, not just brandables.
 
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To my eyes, the first thing that we should remember is that we have to think to a maximum price for each domain we want to buy. If we want to spend over the maximum, just remember that shill bidding or other scams may always appear. If we can't afford that overpay is better wait for another name.
We also have to remember that buy a name with a nice price is more or less unuseful or like nothing done yet because a sale need to match several factrors which also include: buyer needs, buyer money availability and so on. Like also a recent blog post on DNWire say, you can't bring liquidity in a business that it is not liquid. Domains are created to developing purpose and not for investing in resale.
Investing in domains is just a clever way to make money